MTD 100 exclusive! Tire Kingdom CEO Wolford talks growth, new auto service program
During the month of July, www.moderntiredealer.com will present exclusive interviews with executives from some of the "top five" independent tire store chains on the 2009 Modern Tire Dealer 100.
Despite the struggling economy, Tire Kingdom Inc. is on a roll. Part of TBC Retail, the chain added more than 50 stores over the last 12 months. This month, Tire Kingdom is rolling out its new Service Central automotive service program, which encompasses its National Tire & Battery (NTB) and Merchant's Tire stores, plus TBC Corp.'s Big O locations. Tire Kingdom CEO and President Orland Wolford discusses the program and other initiatives in this exclusive interview.
With 733 stores, all of them retail outlets, Tire Kingdom is the second largest independent tire store chain in the U.S., according to the 2009 Modern Tire Dealer 100, which can be seen in the July 2009 issue of MTD, available now.
MTD: How is TBC Retail’s year shaking out?
Wolford: We’re far outperforming the industry and on a same store basis. We’re up in sales – somewhere between 2% and 5%. We are running ahead nicely.
MTD: In the July issue of MTD, we listed Tire Kingdom as having 678 retail stores. Since then, you’ve added more than 50 stores. What percentage of those stores have been new construction vs. acquisitions?
Wolford: The only acquisition that I’m aware of is a three-store acquisition. We took over three Midas Muffler locations in the Washington D.C./Virginia/Maryland area.
MTD: Has Tire Kingdom branched out into any new markets in the last 12 months? Was D.C. a new market for you?
Wolford: No. We’re filling out the markets we’re already in. Collectively, between our Big O stores and our company-owned retail stores, we’re in 42 states, so there aren't a lot of open areas.
MTD: How is the economy effecting your operation? Has it been difficult to obtain financing due to the credit crunch?
Wolford: We have no financing issues. In fact, we continue to look for acquisitions that make sense for us and we’re continuing our new store program this year without any concerns about financing.
MTD: Do you have a specific numeric goal for new stores?
Wolford: Not really. If the opportunity presents itself, the size of the chain really wouldn’t matter to much.
MTD: Do you have other demographic targets when you’re looking at a potential acquisition?
Wolford: We do have areas we’re looking at. But we take into our consideration our geographic footprint.
MTD: What internal mechanisms are in place to spread the growth out so you’re not building stores on top of each other?
Wolford: Tire Kingdom is basically in the south; NTB is in the northeast, midwest and southwest; and then Merchant’s is in the middle Atlantic states. Each brand has its strengths. If we’re already in a market under one brand, it only makes sense to expand that brand.
MTD: Have you added any new programs?
Wolford: We’re about to (launch) our Service Central brand, to be announced in July.
MTD: What’s the concept behind it? Do you think perhaps your stores are simply seen as tire shops and not places where customers can bring their cars in for preventive maintenance or auto repairs?
Wolford: No. In fact, our service business at NTB and Tire Kingdom has expanded immensely... Service Central is a nationwide service program. If you have some service work done at a Big O store in San Francisco and for whatever reason, you have some work done at an NTB store in Chicago, that warranty is covered by the national Service Central brand.
MTD: Will warranties cost extra or are they part of the package?
Wolford: Each service will have its own warranty, (such as) a three-year, 30,000-mile warranty, or whatever it happens to be.
MTD: Tire Kingdom has always been aggressive in terms of advertising and marketing. Can you discuss any initiatives you have rolled out in the last 12 months?
Wolford: We continue to shop every market. Our objective is to make sure we provide a competitive value to the customer in each and every marketplace. We continue to build heavily on brand identification and also making sure we have a competitive value out there.
MTD: What has the tire brand mix been at your stores? Some retailers with whom we’ve spoken report that their customers are flocking to second or third tier products as opposed to major brand products due to tight budgets.
Wolford: I would say more than 50% of our mix would be TBC-supplied products, which would be a lot of private brand tires. People are much more concerned about pricing than I think I’ve ever seen in all my years in the industry. They’re looking for quality and value. That’s the world today.
Managing operating costs will be Tire Kingdom's biggest challenge over the next several months, says Wolford. "That always has been important to the TBC Group and now more than ever."
Stay tuned to www.moderntiredealer.com for exclusive interviews with executives from other tire store chains that have risen to the top of the Modern Tire Dealer 100!